Introduction and Passing of Bills, Union Budget and Constitutional Funds

Subject to Articles 109 and 117 concerning Money Bills and certain Financial Bills, a Bill may originate in either House of Parliament.

A Bill is not treated as passed by Parliament unless both Houses agree to it, either without amendment or with such amendments as are agreed to by both Houses.

A Bill pending in Parliament does not lapse merely because the Houses are prorogued. A Bill pending in the Rajya Sabha that has not been passed by the Lok Sabha does not lapse on dissolution of the Lok Sabha. A Bill pending in the Lok Sabha, or passed by the Lok Sabha and pending in the Rajya Sabha, lapses on dissolution of the Lok Sabha, subject to Article 108.

The President may notify a joint sitting where, after a Bill has been passed by one House and transmitted to the other:

• the other House rejects the Bill;
• the Houses finally disagree on amendments; or
• more than six months elapse without the other House passing the Bill, excluding periods specified by the Constitution.

A joint sitting is not available for a Money Bill or a Constitution Amendment Bill.

Historically, joint sittings have been used for the Dowry Prohibition Bill, 1961; the Banking Service Commission (Repeal) Bill, 1978; and the Prevention of Terrorism Bill, 2002.

Article 109 - Special procedure

A Money Bill cannot be introduced in the Rajya Sabha. After the Lok Sabha passes it, the Bill is transmitted to the Rajya Sabha for recommendations. The Rajya Sabha must return it within 14 days.

The Lok Sabha may accept or reject any or all recommendations. If the Rajya Sabha does not return the Bill within 14 days, the Bill is deemed passed by both Houses in the form passed by the Lok Sabha.

Article 110 - Definition of Money Bill

A Bill is a Money Bill only if it contains provisions dealing exclusively with one or more matters listed in Article 110(1), such as taxation, borrowing, custody or withdrawal of money from the Consolidated Fund or Contingency Fund, appropriation from the Consolidated Fund, charged expenditure, receipt or custody of public money, audit, and matters incidental to those subjects.

If a question arises whether a Bill is a Money Bill, the decision of the Speaker of the Lok Sabha is final under Article 110(3).

When a Bill has been passed by Parliament, it is presented to the President. The President may assent to the Bill or withhold assent.

In the case of a Bill that is not a Money Bill, the President may return it to Parliament with a message requesting reconsideration. If Parliament passes the Bill again, with or without amendment, and presents it again, the President cannot withhold assent.

Article 112 requires the President to cause to be laid before both Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for each financial year. This is the constitutional Annual Financial Statement, commonly called the Union Budget.

The Annual Financial Statement distinguishes expenditure charged on the Consolidated Fund of India from other expenditure and separately shows revenue expenditure from other expenditure.

Current Union Budget documents also include Demands for Grants, the Finance Bill, Appropriation Bill and explanatory/fiscal-policy documents required by the Constitution and the Fiscal Responsibility and Budget Management Act, 2003.

Consolidated Fund of India

All revenues received by the Government of India, all loans raised by it through treasury bills, loans or ways and means advances, and all money received in repayment of loans form one fund called the Consolidated Fund of India.

No money may be appropriated out of the Consolidated Fund except in accordance with law and for the purposes and in the manner provided by the Constitution.

Public Account of India

All other public money received by or on behalf of the Government of India is credited to the Public Account of India. This includes categories such as provident funds and other money where the Government acts in a banking or trustee-like capacity.

The current Union Budget presents the Government accounts under the Consolidated Fund, Contingency Fund and Public Account.

Parliament may by law establish a Contingency Fund of India in the nature of an imprest, to be placed at the disposal of the President so that advances may be made for unforeseen expenditure pending authorisation by Parliament under Articles 115 or 116.

The Contingency Fund of India is governed by the Contingency Fund of India Act, 1950 and the rules made under it.

Article 118: each House may make rules regulating its procedure and conduct of business. The President may, after consultation with the Speaker of the Lok Sabha and Chairman of the Rajya Sabha, make rules for joint sittings and communications between the Houses.

Article 119: Parliament may by law regulate procedure in relation to financial business to secure timely completion.

Article 120: business in Parliament is transacted in Hindi or English, subject to the Chair permitting a member unable to express himself or herself adequately in either language to address the House in the member's mother tongue.

Article 121: Parliament cannot discuss the conduct of a Supreme Court or High Court judge in discharge of judicial duties except upon a motion for presenting an address to the President praying for removal of the judge.

Article 122: courts cannot question parliamentary proceedings merely on the ground of an alleged irregularity of procedure. Constitutional judicial review is not excluded where the issue goes beyond a mere procedural irregularity.

The Seventh Schedule distributes legislative subjects between Parliament and State Legislatures through the Union List, State List and Concurrent List. The numbering of entries has changed over time through constitutional amendments and omissions, so simple statements such as "Union List 97, State List 61, Concurrent List 47" should not be treated as current counts of operative subjects.

The 42nd Constitutional Amendment, 1976 transferred several subjects from the State List to the Concurrent List, including:

• administration of justice and constitution/organisation of courts other than the Supreme Court and High Courts;
• education;
• weights and measures;
• forests; and
• protection of wild animals and birds.

These transfers were constitutional amendments to the Seventh Schedule, not temporary transfers that occur only during an Emergency.

• Article 107: introduction and passing of Bills.
• Article 108: joint sitting.
• Article 109: Money Bill procedure.
• Article 110: definition of Money Bill.
• Article 111: President's assent.
• Article 112: Annual Financial Statement.
• Article 113: Demands for Grants and estimates.
• Article 114: Appropriation Bill.
• Article 115: supplementary, additional and excess grants.
• Article 116: vote on account, vote of credit, exceptional grant.
• Article 117: Financial Bills.
• Articles 118-122: parliamentary procedure and safeguards.
• Article 266: Consolidated Fund and Public Account.
• Article 267: Contingency Fund.